Hearst and Hearst & Ors
[2011] FamCA 470
•10 June 2011
FAMILY COURT OF AUSTRALIA
| HEARST & HEARST AND ORS | [2011] FamCA 470 |
| FAMILY LAW - COURTS AND JUDGES – Disqualification – In view of adverse comments made in relation to the credibility of the husband, whether the Court should disqualify itself from hearing and determining two further issues – Disqualification application granted in relation to the outstanding costs application, given the discretionary nature of such application – Disqualification application refused in relation to an application made by a third party, the determination of which is not dependent on matters of discretion or an assessment of the husband’s credibility. |
| Family Law Act 1975 (Cth) |
| British American Tobacco Services Ltd v Laurie (2011) 273 ALR 429 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Penfold v Penfold (1980) 144 CLR 311 Stephens & Stephens (Disqualification) [2010] FamCAFC 206 |
| APPLICANT: | Ms Hearst |
| FIRST RESPONDENT: | Mr Hearst |
| SECOND RESPONDENT: | Ms Kent |
| THIRD RESPONDENT: | Ms Somers |
| FOURTH RESPONDENT: | Mr JH |
| FILE NUMBER: | SYC | 5110 | of | 2008 |
| DATE DELIVERED: | 10 June 2011 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Coleman J |
| HEARING DATE: | 10 June 2011 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Pigot |
| SOLICITOR FOR THE APPLICANT: | Campbell Paton & Taylor |
| COUNSEL FOR THE FIRST RESPONDENT: | Ms Dalton |
SOLICITOR FOR THE FIRST RESPONDENT: | Lee Dalton & Associates |
| COUNSEL FOR THE SECOND & THIRD RESPONDENTS: | Mr Messenger |
| SOLICITOR FOR THE SECOND & THIRD RESPONDENTS: | Messenger & Messenger |
| REPRESENTATION FOR THE FOURTH RESPONDENT: | In person |
Orders
That the pending applications with respect to the costs of the substantive proceedings which concluded on 11 March 2011 be adjourned to a date to be fixed before another judge.
That Mr Hearst sign a transfer of the stock horse known as Horse A being Registration No … black Australian stock horse mare to Mr JH.
That in the event of the husband failing to comply with Order 2, by 4pm this day the Registrar of the Family Court of Australia Parramatta Registry is appointed to execute such transfer pursuant to s 106A of the Family law Act 1975 (Cth).
That there be no order for costs of today.
IT IS NOTED that publication of this judgment under the pseudonym Hearst & Hearst and Ors is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT PARRAMATTA |
FILE NUMBER: SYC 5110 of 2008
| Ms Hearst |
Applicant
And
| Mr Hearst |
First Respondent
And
| Ms Kent |
Second Respondent
And
| Ms Somers |
Third Respondent
And
| Mr JH |
Fourth Respondent
EX TEMPORE
REASONS FOR JUDGMENT
Before the Court for determination are two applications by Mr Hearst (“the husband”) for orders that the Court disqualify itself from hearing and determining two issues.
The first relates to the costs of the substantive Part VIII proceedings between the parties which were finally determined by orders made on 11 March 2011. Those orders gave effect to the primary judgment of the Court which was delivered in October 2010. The husband seeks that the Court disqualify itself from hearing and determining the outstanding costs applications in the substantive proceedings.
That application is opposed by Ms Hearst, the wife. With respect, quite properly, Counsel for the second and third respondents makes no submissions in relation to the recusal application.
If the recusal application is upheld then another Judge will have to determine the outstanding costs dispute or disputes. Whether that be on the extensive submissions which have already been filed and which the Court has read or, as Counsel for the second and third respondent submitted, further submissions, would be a matter for that Judge. On the other hand, if the recusal application is refused, this Court will proceed to deliver judgment in the costs proceedings.
The second application made by the husband is that the Court disqualify itself from hearing and determining an application made by a third party who, if leave to intervene were granted, if it be necessary to do so, would be the fourth respondent. That person is an adult child of the parties, Mr JH. His application was filed 8 June 2011 and was amended in the light of discussion between the Court and the son, whom the Court will refer as “[Mr JH]”. The application is in substance that the husband sign transfer of registration documents of a horse, Horse A (hereinafter referred to as “the horse”) to him and that, if the husband fails to do so, the Registrar be appointed to sign on behalf of the husband pursuant to s 106A of the Family Law Act 1975 (Cth) (“the Act”).
Mr JH opposes his father’s application that the Court disqualify itself from hearing his application.
Quite properly, Counsel for the husband has made submissions with respect to both recusal and the substantive matter itself. It is appropriate to deal with the two matters separately because different considerations arise in each of them.
A Court undoubtedly has the power to hear and determine the pending costs dispute. There can be no question of that.
The law which governs the recusal application is not in doubt. It has been referred to by Counsel for the husband and it is unnecessary and unhelpful to restate the law in detail for present purposes. The leading authorities are the decisions of the High Court in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 (“Ebner”) and British American Tobacco Services Ltd v Laurie (2011) 273 ALR 429 (“British American”). It emerges from those cases, firstly from Ebner as explained by French CJ in his judgment in British American, that there were, in effect, two elements to what is described as the apprehension of bias principle.
It should be said that in this case the issue is not one of actual or apprehended bias, but rather that a reasonable observer would apprehend an absence of impartiality on the part of the Judge. The majority, Gleeson CJ, McHugh, Gummow and Hayne JJ said in Ebner (at paragraph 8):
The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits.
I pause here to record that in this case the first step can be taken to have been made out within the context of the recusal application in the pending costs proceedings. That is because on 11 March 2011, as the transcript records, the Court made clear that the husband’s refusal to do what he unequivocally stated on his oath or affirmation to the Court that he would do in August 2009 raised real doubts in the Court’s mind as to his credibility.
As Counsel for the husband submitted, a reasonable observer would conclude, in the light of the Court’s comments on 11 March 2011, that were credit an issue in any proceedings involving the husband he would not be seen to be commencing with an impartial adjudicator. And that is plainly the case, as the transcript of 11 March 2011 confirms.
Returning to the majority judgment in Ebner, their Honours went on to say (in paragraph 8):
The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.
It is that requirement which is pivotal to the Court’s determination of the current recusal application.
French CJ in his judgment in British American reiterated what the High Court had said in the passage cited a moment ago from the earlier decision in Ebner. His Honour explained (at paragraph 37) that of the two steps referred to in Ebner, the first was:
.. “the identification of what it is said might lead a judge … to decide a case other than on its legal and factual merits”. …
His Honour referred to the second being:
… an “articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits”. … (footnotes omitted)
He went on to say:
In Ebner the constructed observer was the “fair-minded lay observer” concerned only with a reasonable apprehension of bias. The test is generally applicable to cases of asserted apprehended bias. … (footnotes omitted)
In their joint judgments in British American, Heydon, Kiefel and Bell JJ said (at paragraph 139):
It is fundamental to the administration of justice that the judge be neutral. It is for this reason that the appearance of departure from neutrality is a ground of disqualification.179 Because the rule is concerned with the appearance of bias, and not the actuality, it is the perception of the hypothetical observer that provides the yardstick. It is the public’s perception of neutrality with which the rule is concerned. In Livesey it was recognised that the lay observer might reasonably apprehend that a judge who has found a state of affairs to exist, or who has come to a clear view about the credit of a witness, may not be inclined to depart from that view in a subsequent case. It is a recognition of human nature. (footnotes omitted)
In this case the passage of the transcript of 11 March 2011 to which the Court was referred, as acknowledged to Counsel for the husband during the course of debate earlier this morning, and as is not in doubt and could not be in doubt, would leave a reasonable observer entitled to apprehend that in any issue where the husband’s credibility was an issue, he would be unlikely to succeed. The Court’s comments on 11 March 2011, which were made in the light of the transcript of the evidence the husband had previously given in August 2009 leave little room for doubt (see page 8 from line 34 and following) that, whereas in its primary judgment the Court made favourable observations of the credibility of the husband, in the light of what had occurred subsequently by 11 March 2011, the Court had a different view of the credibility of the husband.
The issue of credibility per se does not necessarily establish the second element described in Ebner, which is the “logical connection”, as it might briefly be referred to. That is particularly so in this case where, having read the submissions of all parties with respect to costs, save for submissions in reply on behalf of the second and third respondents, no possible issue of credibility arises, nor could any question of credibility or its absence reasonably impact upon the determination of the outstanding costs issues.
In this context the decision of the Full Court of this Court in Stephens & Stephens (Disqualification) [2010] FamCAFC 206, a well known case, involved the question of disqualification of the trial Judge from hearing and determining a costs dispute in circumstances where the trial Judge had made clear adverse findings about the husband in the primary judgment. As is generally well known in the legal profession, the primary judgment was appealed unsuccessfully by Mr Stephens to the High Court. In its decision delivered on 27 October 2010 the Full Court, comprising Finn, Coleman and Thackray JJ dismissed Mr Stephens’ appeal against Strickland J’s refusal to disqualify himself from hearing and determining the costs of proceedings which were then pending, Strickland J having been the trial Judge.
In the course of the primary judgment, Strickland J referred to Mr Stephens’ “egocentric personality” and his “view that it was entirely up to him what he did with the assets. This was a blatant attempt by the husband to move assets from the reach of the wife and the Family Court.” His Honour thereafter referred to examples of the husband, Mr Stephens, “concocting a story to justify his attempts to place assets beyond the reach of the wife and the Family Court.” In the course of his judgment, his Honour also referred to Mr Stephens having suggested falsely that a particular event should be viewed in a particular way. His Honour made other quite trenchant criticisms of Mr Stephens, notwithstanding which he retained the carriage of the outstanding costs dispute.
In the course of its judgment the Full Court rejected the submissions on behalf of Mr Stephens that the second element required by Ebner had been made out. However, that was subject to the rider that if, contrary to what appeared to be the case on the material before the Full Court, the issue of credit arose in the course of Strickland J determining the pending costs proceedings, his Honour may well be obliged to recuse himself from hearing those proceedings.
Returning then to the facts of this case, without again reading on to the record lines 34 to 43 at page 8 of the transcript of 11 March or anything else then said which was critical of the husband’s credit - and there were other passages critical of his credit – save to the extent to which reference will shortly be made, nothing emerging from the transcript establishes or could reasonably give rise to an apprehension of an absence of impartiality by virtue of the adverse comments on 11 March 2011 about the credibility of the husband.
That is said against the background of the Court actually having the submissions with respect to costs. There is no speculation required in that regard. The submissions refer to a limited number of topics, none of which, in any way, involves or is impacted upon by the credibility of the husband.
But for line 47 of the transcript of 11 March 2011, the Court would be comfortable in rejecting the recusal application in the pending costs proceedings. The difficulty, though, as Counsel for the husband submitted, is that, with a regrettably poor choice of word, the Court said on 11 March “anything involving discretion, he is gone”.
As is not in doubt, the determination of costs applications is discretionary. The High Court made that clear decades ago in Penfold v Penfold (1980) 144 CLR 311. The provisions of s 117 of the Act, and particularly s 117(2) of the Act which govern costs, leave no room for doubt that determining costs disputes involves the exercise of discretion.
Whilst the Court, having taken two decades ago a judicial oath to dispense justice without fear or favour, is entirely confident that it would do so if it were permitted to, having regard to what the High Court has said in Ebner and very clearly reiterated in British American, and notwithstanding that, regrettably, it may well expose all the parties to expense which is unnecessary, the presence of the word “discretion” at line 47 is, in the Court’s view, sufficient to place this matter on what might be described as the other side of the line. The Court will accordingly decline to determine the pending costs dispute; another Judge will do that.
The Court turns to the recusal application, and if it be refused, the application of Mr JH. Obviously if the recusal application succeeds then the second issue cannot arise.
Counsel for the husband has taken no issue as to the existence of jurisdiction, whether it be the Court as currently constituted or any other Judge, to make orders in the terms sought by Mr JH. Lest there be any doubt about it, if the matter is to be looked at elsewhere, the Court is comfortably satisfied that Mr JH’s application constitutes a matrimonial cause within the definition of section 4 of the Act, being proceedings falling within s 4(f) of the Act, they being proceedings – in this case completed proceedings – of a kind falling within the subsections (a) to (eb) which includes proceedings with respect to property of parties to the marriage or either of them.
It is unnecessary to restate the legal principles which apply to this recusal application. They are the same as govern the recusal application in the pending costs proceedings. Again, it is not in doubt that were the credit of the husband to assume significance in the determination of Mr JH’s application, the Court would disqualify itself.
The difficulty for the applicant in the Court’s view, however, as suggested to Counsel for the husband during the course of debate earlier today, relates to the second element to which the High Court referred in Ebner, that is to say the connection between the matter complained of, which in this case is an adverse view about credibility, and the determination of the case on its merits.
The Court is not persuaded that the second element or requirement referred to in Ebner and reaffirmed in British American has been made out in this case. The reason for that is simple. The issue raised by Mr JH’s application does not involve any issue of credibility. It does not involve partiality or impartiality or anything else.
When giving evidence at the trial of the proceedings in August 2009, the husband was cross-examined by senior Counsel for the wife. That cross-examination did not occur in a vacuum. It arose because, as the record of the trial confirms, the property of the parties to the marriage, or determining the property of the parties to the marriage, at least when the trial commenced, raised questions about the horse. Unsurprisingly, in those circumstances, senior Counsel for the wife cross-examined the husband about the horse.
Earlier this morning the Court read on to the record, because Counsel for the husband had not seen it, the transcript of the proceedings on 26 August 2009. The following exchange occurred between counsel for the wife, Mr Lethbridge SC, and the husband, who was on oath or affirmation at that time:
MR LETHBRIDGE SC: Thank you. Now, sir, could I just show you a registration certificate with respect to a horse by the name of [Horse A]? Now, sir, that is the horse that is located in the territory, isn’t it?--- Presume so.
Well, when you say you presume so - - - ? Well, it was in the Kimberlies two years ago. Is it in the Kimberlies? Is it in the Northern Territory or is it in Queensland? I don’t know where that horse is at the moment. I presume – I presume it is in the Northern Territory.
Well, you’ve seen a valuation of the horse, have you not, carried out by a valuer from Katherine?--- I have.
And that horse is a horse that’s in the possession of your son [Mr JH], isn’t it?--- It is.
Now, sir, I’m a little unclear about your position in relation to the horse. Are you saying that you are content that the horse go to [Mr JH], or are you not saying it?--- I am content that the horse be transferred over to my son, [Mr JH]. I am the current owner of that horse at the moment.
I understand that, because it is what appears on the registration certificate?--- It does.
Now, you are content, then, to transfer ownership of the horse immediately to [Mr JH], is that the position?--- I am.
We will arrange for some registration papers to be provided to you through your solicitors, and that can occur. Now, sire, in your case, you are aware, aren’t you, that there have been some suggestions that moneys paid to [Mr JH] by the wife since separation should be added back; that is, should be dealt with as if they were still owned by her?
MR BATEY: Well, check this shouldn’t – I thought the wife’s case was they are loan moneys, and they are going to be paid back to her, and they’re on her side of the barrel she – I thought was common ground.
…
(Transcript of proceedings, 26 August 2009, pages 25-26).
A number of things emerge from the transcript. The first is that the husband readily and unequivocally offered to transfer the registration of the horse to Mr JH. Nowhere else in the transcript, and the Court has looked at the transcript, was the topic ever revisited nor was it ever likely to have been given the evidence the husband gave. The evidence, with respect to the husband’s learned Counsel who had not seen the transcript, does not contain the qualification suggested by her in submissions this morning.
Interestingly, and without in any way suggesting that it is the fault of Counsel for the husband, what was submitted this morning to have been the husband’s assertion in August 2009 also differs from what he has suggested in an affidavit recently.
Had the Court been asked on 26 August 2009, after the cross-examination to which reference has just been made, to have done so, there is not the slightest doubt that all present would have consented to the making of an order for the transfer of the horse to Mr JH. Regrettably, the Court’s faith in the husband doing what he said he would having not been fulfilled, it is regrettable that that did not occur then. The position today is quite simply that granting Mr JH’s application does not involve any question of credit on the part of the husband. The application arose, as is not in doubt, and as was explained to Mr JH during the course of debate earlier this morning, simply because of the evidence which the husband gave.
There is no question that the Court had power then, and still has power, to make an order for the transfer of the horse. The issue of credit, accordingly, simply has no bearing on this topic. There is no logical connection between this issue and the Court’s current less than favourable view of the credibility of the husband.
As the authorities make clear, there is a material difference between an apprehension that a Court will decide a case in a way that one does not want it to, and an apprehension that the Court will not decide the case on its merits.
Here, the merits are not in doubt. There is no dispute about the merits. That is the evidence the husband gave on oath or affirmation. Other than my assuming or presuming or accepting, which the Court does not, that he was not telling the truth when he gave that evidence, there is simply no factual issue which the Court could or needs to determine.
That being so, and this simply being in the nature of a formality, that is to do something which with hindsight should have been done on 26 August 2009 but was not, no logical connection between the matter and the feared deviation has been demonstrated. The recusal application with respect to Mr JH’s application is, accordingly, refused.
The reasons for refusing that application are, in effect, conclusive of the fate of Mr JH’s application. He seeks an order that his father do what he represented to the Court he would do. That should happen.
What the effect of registration is, is unknown to this Court. There is no evidence before it. Whether the transfer of the registration is a transfer of equitable ownership or the like is not a matter for this Court to determine. This Court is simply giving effect to what the husband himself offered to do at a time when he was represented by his present, and very experienced, attorney and very experienced Counsel.
Not insignificantly, the evidence was given, as noted, in August 2009. Subsequent to that date, in the course of further hearing submissions as to the terms of the orders appropriate to be made in the substantive proceedings, and at least one listing of the matter in open Court, there was never any suggestion by the husband that he wished to change his evidence. There was no suggestion by him that he had been mistaken in giving his evidence, that he had been misled or anything of that kind. Having regard to the terms in which he gave the evidence, there never could have been.
The issue involves no exercise of discretion. If it did, then the Court, to be consistent, would have had to recuse itself as it did with respect to costs. But no question of credibility, no question of discretion arises in relation to Mr JH’s application. The Court will entertain it and will grant it.
I certify that the preceding forty four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on 10 June 2011.
Associate:
Date: 20.06.11
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